SEATTLE -- REI, the nation's leading specialty retailer of quality outdoor gear and apparel, achieved record annual sales of $2.0 billion in 2013, up 5.9 percent from $1.9 billion the previous year. Comparable store sales, inclusive of direct to consumer sales, increased 2.9 percent. Operating income, on a non-GAAP basis, excluding charitable donations, patronage dividends and non-comparable charges, was $153.3 million, up from $132.6 million in 2012. Likewise, net income, on a non-GAAP basis, was $34.5 million, up from $26.6 million in 2012. REI is a cooperative business with more than five million active members.
"I'm proud of the results our teams produced in this dynamic retail environment," said Jerry Stritzke, REI's president and CEO. "We are working hard to enhance the connection we have with our members and customers, whether through inspiration in one of our stores, an easy and satisfying experience shopping at REI.com, or engaging with us via our mobile platform."
Members Share in the Co-op's Profitability
REI shares the majority of its operating income with its members through the declaration of an annual patronage refund. For 2013, REI declared an annual patronage refund of $114.7 million, a 10 percent increase over the previous year. Patronage refunds will be distributed to REI members in March, 2014. Anyone can shop at REI but only members share in the co-op's profits.
The co-op celebrated its 75th anniversary in 2013 and welcomed more than 840,000 new members by the end of the year.
2013 REI Highlights
In 2013, REI opened new stores in Overland Park, Kan.; Tyson's Corner, Va.; Silverdale, Wash.; Jacksonville, Fla.; and Oxnard, Calif. As of year-end 2013, REI operated 132 stores in 33 states. In early 2014 REI closed its store in Brentwood, Calif.
For the 17th consecutive year FORTUNE magazine has ranked REI as one of the "100 Best Companies to Work For." The co-op ranked #69 on the 2014 list.
REI-brand products earned national recognition in 2013, including an OutdoorGearLab.com "Top Pick" for the REI Stuff Travel Daypack 22. REI Private Brands and its cycling brand, Novara, which are only available at REI, offer outdoor products that combine high performance, value and innovation.
For more than 25 years REI Adventures, the co-op's award-winning travel company, has been taking members and families on active adventures around the world. As a global leader in guided active adventure travel, REI Adventures saw a 15 percent increase in sales last year that brought thousands of travelers to unforgettable destinations close to home and far away.
REI Outdoor School, which is the national leader in outdoor education, experienced sales growth of more than 25 percent last year through its in-store and field classes and presentations. REI Outdoor School offers thousands of unique classes and outings across the country to help people get ready for outdoor adventures. Classes range from How to Ride a Bike to Introduction to Rock Climbing, and outings include such activities as snowshoeing, kayaking and stand-up paddle-boarding.
In 2013, REI donated more than $3 million to national and community-based nonprofit organizations focused on caring for popular and accessible places where our members play. Since 1976, REI has provided more than $44 million of financial support to local and national non-profit organizations working on stewardship of natural and scenic places and outdoor recreation causes.
REI has a commitment to understanding and addressing its operating impact on the environment. Last year the co-op made good progress against this commitment. While the co-op grew nearly six percent in 2013 over 2012, REI increased its energy consumption by just 0.1 percent, reduced its greenhouse gas emissions by 39.5 percent and reduced the tons of waste it sends to landfills by 3.3 percent.
Selected Pro Forma Results
In December 2013, the REI Board of Directors approved a change in the co-op's fiscal year-end from a calendar year-end ofDec. 31 to a 52/53-week fiscal year ending on the Saturday closest to Dec. 31. Results reported in the audited financial statements for 2013 represent a transitional "stub-period" of Jan. 1, 2013 to Dec. 28, 2013 (362 days) and for 2012 are based on a calendar leap year (366 days). For comparative purposes in this press release, below are pro-forma results for both 2013 and 2012 on a 52-week period ending on the Saturday closest to Dec. 31.
In addition, the 2013 results presented below exclude non-comparable charges of $24.9 million related to the impact of the cancellation of the launch of a private brand and certain technology-related impairments. The information presented below provides REI members, employees and other interested parties with a comparable overview of REI's operational performance. REI's audited consolidated financial statements for 2012 and 2013 can be viewed at REI.com.
REI is a $2 billion national multichannel retail co-op headquartered outside of Seattle. With more than 5 million active members, REI serves the needs of outdoor adventurers through innovative, quality products; inspiring classes and trips; and integrated customer service that allows shoppers to buy great gear and clothing in any way they want. REI has 131 stores in 33 states, as well as REI.com and REI.com/outlet. Anyone may shop with REI, while members pay a one-time $20 fee to receive a share in the company's profits through an annual patronage refund. Membership in the co-op also includes special promotions and discounts on REI Adventures trips and REI Outdoor School classes.